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An all-star screen adaptation of the successful Broadway play, Cabin in the Sky (1943) tells the story of the gambler Little Joe who is seriously wounded in a barroom fight. His pious wife, Petunia, prays for him to have a second chance so he can get into heaven. Joe survives, but God's General and Lucifer, Jr. begin the battle for his soul.

Conflicts arose on the set between director Vincente Minnelli, Lena Horne, and Ethel Waters because Minnelli and Horne were reportedly dating. The problems reached their peak over the number "Honey in the Honeycomb." Waters was originally to perform the song as a ballad while Horne would do a dance to it. But Horne broke her ankle and the songs were reversed. She got the ballad and Waters the dance. Ethel Waters did however sing the Academy Award nominated "Happiness is Just a Thing Called Joe." This was one of three new songs written for the film. In her autobiography, His Eye is on the Sparrow, Waters commented on her performance in Cabin in the Sky: "I rejected the part because it seemed to me a man's play rather than a woman's. Petunia, in the original script, was no more than a punching bag for Little Joe. I objected also to the manner in which religion was being handled. After some of the changes I demanded had been made I accepted the role, largely because the music was so pretty. But right through the rehearsals and even after the play had opened, I kept adding my own lines and little bits of business to build up the character of Petunia."

Lena Horne took on one of her few acting roles as the temptress Georgia Brown in Cabin in the Sky and it proved to be the ideal showcase for her musical talents and natural beauty. Minnelli originally intended to introduce Horne's sexy character in a bubble bath scene but the censors refused to let him film it. In most of her other films Horne played herself, and she rarely had interaction with the main stars. Instead, she would come onscreen, perform a number, and exit. This was done so her scenes could be easily trimmed if they offended southern audiences.

It was said that Minnelli had originally wanted Dooley Wilson (the pianist/singer from Casablanca (1942) who performed "As Time Goes By") for the role of Little Joe since he created the role on the stage but the studio insisted on Eddie "Rochester" Anderson because he was the bigger name. In his biography, I Remember It Well, Minnelli recalled the making of Cabin in the Sky: "If there were any reservations about the film, they revolved around the story, which reinforced the naive, childlike stereotype of blacks. But I knew there were such people as the deeply pious Petunia and Joe, her weak gambler of a husband, and that such wives constantly prayed for the wavering souls of their men...If I was going to make a picture about such people, I would approach it with great affection rather than condescension." As for the unique look of the film, Minnelli added, "Arthur (Freed) and I were looking at a finished print of the picture one day. I don't know which one of us suggested the possibility of reprocessing the black and white film in a sepia tint. We experimented with a portion of it. The film was transformed. It seemed more magical. Sepia created a soft, velvety patina more flattering to the actors' skin tones. The picture was released that way."

Cabin in the Sky was the first all-black musical in nearly fourteen years and only the fourth all-black film by a major studio since the coming of sound. It was also director Vincente Minnelli's first feature film.